Taiwan on a roll in 2007 with 65-nm in its sights

Capital investments continue to flow into Taiwan’s IC manufacturing infrastructure, making the island the hottest market for equipment and materials this year.

Dai Nippon Printing Ltd. announced Monday (Jan. 22) that it is building a $200 million photomask factory in the Hsinchu Science Park (see press release section), aimed at 65-nm mask production starting in May 2008.

Formosa Sumco announced that it plans to build two new facilities to produce 300-mm wafers at its Yunlin, Taiwan site. Formosa Sumco is a joint venture between the Formasa Plastics Group and Japan’s Sumco. The first plant will reach volume production of 300-mm wafers in early 2008.

Overall, Taiwan is expected to invest more in 2007 than Korea or Japan. VLSI Research Inc forecasts Taiwan’s total capital expenditures will top $14 billion this year, a 12 percent increase, compared with about $10.5 billion for Korea and approximately $13.5 billion for Japan. Only U.S.-based companies will spend more this year.

For the foundries, 65-nm production is driving investments. UMC announced early this year that it will finish its newest 300-mm fab by the end of this year, next to its Fab 12A in Tainan, and move equipment in early next year. Total price tag: $5 billion. Xilinx is a key customer and already the partners are making Xilinx FPGAs at 65-nm design rules.

TSMC spokesman Chuck Byers said TSMC has more than 40 customers running production at 65-nm design rules, with “multiple thousands of 12-inch wafers in production” at the end of 2006. Even 5-10 percent of TSMC’s startup customers are getting into 65-nm production in 2007, compared with about 20 percent of the startups using 90-nm and about 30 percent sticking with 130-nm, Byers said.

Taiwan now has more breadth, thanks to the success of its DRAM industry. Powerchip Semiconductor and its Japan-based partner Elpida, ProMOS, and Nanya Technologies are complementing the strong growth by the foundries TSMC and UMC.

If foundries grow worldwide revenues from just north of $30 billion this year to just south of $50 billion in 2010, as Byers predicts, Taiwan will continue to have stable capital expenditure growth. With foundries as the foundation, the upside is coming from continuing market share gains by the islands’ makers of DRAMs, flash, and CMOS image sensors.

About weQuest:weQuest's are written by G Dan Hutcheson, his career spans more than thirty years, in which he became a well-known as a visionary for helping companies make businesses out of technology. This includes hundreds of successful programs involving product development, positioning, and launch in Semiconductor, Technology, Medicine, Energy, Business, High Tech, Enviorntment, Electronics, healthcare and Business devisions.